Australian regulator seeks advice on crypto-related assets – Bitcoin News

The Australian Securities and Investments Commission (ASIC) recently opened a consultation to define methodologies and best practices for regulating crypto assets. The consultation paper seeks guidance on what crypto assets qualify as underlying assets and how that decision can be made. The proposal could signal the emergence of new crypto-based products in the Australian market.

Australian regulator seeks advice

The Australian Securities Commission has issued a public consultation paper to decide how cryptocurrency-based products should be regulated. The paper, entitled “ASIC Advises on Crypto-Asset-Based ETPs and Other Investment Products,” seeks advice on several key issues that could affect the issuance of cryptocurrency-based derivatives such as ETPs.

For ASIC, cryptocurrencies are special assets, the effects of which must be regulated with stricter standards. In the paper, ASIC states that they are:

Aware of the interest in and demand for domestic crypto asset ETPs. However, we are also aware of the real risk of harm to consumers and markets if these products are not properly developed and operated.

The paper recognizes different types of crypto assets and emphasizes that not all cryptocurrencies are considered to be underlying assets. However, the ASIC suggests a number of conditions that a crypto-asset must meet in order to be an underlying asset: a high level of institutional support, the availability of service providers to support ETPs that offer exposure to the crypto-asset , a mature spot market, a regulated futures market and the availability of robust and transparent price mechanisms.

Australia could follow Canada and Brazil

With this consultation, the Australian government is signaling its openness to market-driven regulations. Many think this is a very different proposal from what governments like China are doing. China is orchestrating a full cryptocurrency crackdown by pushing exchanges and mining operations out of its territory.

However, Australia appears to be more neutral when it comes to crypto. Treasury Secretary Jane Hume said in May that Australians are free to invest in these assets while complying with applicable regulations. She noted:

We take no problem with consumers who invest in cryptocurrencies. But, like investments in any asset class, they are subject to Australian laws, including our conduct, know-your-client and tax laws. It is not a free pass.

In summary, the goal is for investors to finally have a cryptocurrency-based ETF available in the country. As a result, the task of retail and institutional investors looking to gain exposure to cryptocurrencies would be simplified. Australia could follow countries like Brazil and Canada that already have crypto ETF products by enacting crypto-friendly regulatory frameworks.

What do you think of the latest ASIC consultation paper? Let us know in the comments section below.

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